A taxing question for Greek shipowners – to stay or go?
The Greek shipping community has sent a clear message to the Athens government: it is paramount a shipping community is competitive and enjoys a stable environment in which to operate. This is not the case today and hence there is so much talk about shipowners in particular, but not only owners, are developing a plan B should they be forced to seek another home-base.
This was a clear message to come out of the Marine Money Conference in Athens, last week. Addressing the option of whether ‘to stay or go’ a five member panel comprising, a banker, a lawyer, the coo of a US-listed shipowner, a private shipowner and a journalist, moderated under the watchful eye of a financial consultant, agreed no one wants to leave Greece, but if forced by operating circumstances they will.
“Introduction of capital controls and the talk of a Grexit are a nightmare. The main thing for a company is the operating environment,” said Iraklis Prokopakis, coo, US-listed Danaos Corp, adding the biggest problem is “discussing the industry, with people who give the impression we are better off without you”.
Dimitris Anagnostopoulos, senior vp, Aegean Baltic Bank, said it is only reasonable owners have created a plan B, but moving a company is expensive and if the present operating modules remain in place “there is no need to panic”.
George Paleokrassas, partner, Watson, Farley & Williams law firm, said the publicly-listed companies are driving the relocation consideration, “but they have different reasons”.
The Mediterranean temperament is playing a role, “especially on the part of the government” in creating the present uncertainty, thought George Gourdomichalis, ceo, Blue Wall Shipping. He agreed “some owners have beefed-up their offices overseas”, but while the tax issue is of great concern this is not tax driven, but “it is the need for a stable regime on all levels in Greece”. Gourdomichalis said the industry simply does not want to be put at a competitive disadvantage.
Shipping companies located in Greece already pay the highest tax rates in the EU and they are higher than their Asian and US counterparts, claimed the panel. Prokopakis said companies based in Greece “can’t afford to pay a single cent more”, after the recent introduction of an increased tonnage tax scheme set to run until 2017.
Gourdomichalis noted that while the EU is pushing the Greek government to adopt amendments of the taxation laws for shipping, with a view to further increases, “at least five EU-member states have been lobbying Greek ship owners at the highest level, promising them lower taxes and other benefits, if they choose to relocate their businesses to them”. This is “very disconcerting” said Gourdomichalis.
The owner said dividend tax “is a critical issue and owners will have to decide if being a tax resident in Greece or somewhere else is better”. However, Anagnostopoulos pointed out “finding a tax shelter is not so easy today”. He said the Common Reporting System (CRS) being introduced in some 110 countries, including Europe, means all financial transactions will be closely monitored as will proof of residence. He said the collection of data will start early 2016 and CRS will likely be introduced in the autumn of 2017.
All panelists agreed owners are content to stay in Greece given they can access a pool of highly capable experienced shipping people, while the Greek maritime cluster is already among the best in the business, in terms of quality of services.
Panelists also stressed “once a decision is taken to leave, it is difficult to come back”.
As pointed out from the conference floor by Michalis Pantazopoulos, md of LISC (Hellas) “it is the social responsibility of shipping to stay in Greece as the livelihood of the country depends on shipping”.
